Remember the initial estimate pulled in at 818K from the NFP reading in March.
Figure 1: Nonfarm payroll employment rate from CES (blue), reported from pre-CES benchmark (red), from original Philadelphia benchmark (tan), Goldman Sachs estimates for first revision (blue). The early benchmark is calculated using the ratio of the total regions of the initial benchmark to the total regions. Source: BLS via FRED, BLS, Philadelphia Fed, and author’s statistics.
Why is the Goldman Sachs ratio so close to the Philadelphia Fed’s first benchmark? Earlier, GS argued that under-reporting of employment of unauthorized immigrants could explain the disparity, as the original benchmark is based on QCEW statistics that require SSNs etc. At the point today, GS marks the first major benchmark review in states and industries with large shares. of unauthorized immigrants. Chart 2 from Peng and Mericle, Goldman Sachs, today.
Source: Peng, Mericle, “US Daily: Q&A on the Effect of Immigration on the Preliminary
Benchmark Revisions to Payrolls,” Goldman Sachs, 30 August 2024.
How about a CPS series tailored to the NFP concept. Considering the likely undercount of immigrants placed in the BLS population controls, it makes sense to look at the adjusted series. This looks like this:
Figure 2: The CES nonfarm payrolls rate (blue), derived from the CES preliminary benchmark (red), from the Philadelphia preliminary benchmark (tan), Goldman Sachs estimates for the preliminary review (blue), and the CPS series prepared for the NFP concept, prepared for the account. in CBO’s immigration estimates (see text here) (teal), all in 000s, based on the early benchmark is calculated using the ratio of the total of the original benchmark states to the total of the states. The adjusted CPS series was adjusted using a lower activity rate than the BLS survey series. Source: BLS via FRED, BLS, Philadelphia Fed, and author’s statistics.
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